Zopa to launch digital banking service, becoming latest group to take the fight to traditional high street banks

Reporter covering industry, outsourcing and infrastructure, as well as pensions and economics. Get in touch: alex.daniel@cityam.com

Follow Alex

Zopa said it would roll out fixed term savings accounts, credit cards and a money management app next year (Source: Getty)

Alex Daniel

Peer-to-peer lender Zopa is to follow through on continued hints that it would launch a bank, this morning announcing that it had acquired a license to do so.

The company said it will roll out a range of new banking products next year, including fixed term savings accounts, credit cards and a money management app, becoming the latest business to try to take on big banking, following the meteoric rise of groups like Monzo.

Zopa, the world’s oldest peer-to-peer (P2P) lender, has dropped several hints in the past that it wanted to launch a bank, hiring former Barclays executive Peter Herbert to spearhead a new board structure aimed at branching out from its existing service in April and raking in £60m in a recent fundraising round.

In an announcement this morning, the company said it had carried out research suggesting over half of British adults did not think their banks “operate with customers’ best interests at heart”.

It said its service would do away with traditional consumer gripes at big banking, like sign-up offers that aren’t available to existing customers or hidden fees and charges.

Currently, Zopa has a bank licence with rules which will apply throughout the ‘mobilisation’ phase of the launch, with Financial Conduct Authority (FCA) and Prudential Regulation Authority (PRA) putting introductory restrictions in place. A full licence will be granted once Zopa meets the conditions set by the regulators in the mobilisation phase.

Zopa chief executive Jaidev Janardana said: “Acquiring our banking licence is the starting point for Zopa to become a major force in retail banking.

“When we pioneered the peer-to-peer lending model globally in 2005, we did so by listening to customers and creating a better product for them.

“We will bring the same focus to our banking products – drawing on tech innovation, our values of fairness and transparency, and better customer service to help even more people to feel-good about money.”